Introductory Remarks of President of the Republic of Indonesia at the Limited Cabinet Meeting on Merging of SOEs in Aviation and Tourism Sectors Thursday, 6 August 2020 at the Merdeka Palace, Jakarta

Bismillahirrahmanirrahim.

Assalamu’alaikum warahmatullahi wabarakatuh,

Good Morning,

May peace be upon us all.

Distinguished Vice President,

Distinguished Ministers,

Ladies and gentlemen.

Yesterday, the BPS (Central Statistics Agency) has released our economic growth report in the second quarter, falling to minus 5.32 (percent) and I noted that two sectors that are contracted very deeply are tourism and aviation sectors. The number of foreign tourists who came to Indonesia was 482,000 people in the second quarter of 2020 and it declined by 81 percent quarter-to-quarter and declined by 87 percent year-on-year. The contraction was very deep.

But in my opinion, this decline has become our momentum to consolidate and our momentum to make a transformation in the tourism and aviation sectors through better structuring of flight routes, determining hubs and super hubs, as well as the possibility of merging state-owned aviation and tourism industries in order to design more visible directions. So should the next pandemic strikes, economic foundation in those sectors will be stronger and better.

Therefore, on this meeting I want to emphasize the following things:

First, I notice that Indonesia has too many and uneven airline hubs, is this much needed? There are currently 30 international airports in the country but 9 percent of the total traffic is concentrated only at four major airports, namely Soekarno-Hatta in Jakarta, Ngurah Rai in Bali, Juanda in East Java, and Kualanamu in North Sumatra.

Second, we must have the courage to determine which airport that has the potential to be an international hub by considering its geographic location and characteristic of the region. I have noted that there are 8 international airports that has the potential to become hubs and super-hubs, which include Ngurah Rai, Soekarno-Hatta, Kualanamu, Yogyakarta, Balikpapan, Hasanuddin, Sam Ratulangi, and Juanda in Surabaya.

Third, in order to make a leap in the tourism sector as well as the management of the tourism ecosystem and its supporting facilities, including aviation, it must be designed with more integrated and consolidated management from upstream to downstream. This has never been done, starting from airline to airport management, management of flight service that is connected with management of destination, with hotel and travel management, as well as with management of local products and our creative industries.

That’s all for my introduction.

Thank you.

Translated by Galuh Wicaksono

Reviewed by Mia Medyana